Deep Energy Retrofits Are Often Misguided

It’s time for energy retrofit specialists to overcome their prejudice against PV systems

Deep energy retrofit jobs are frighteningly expensive. The energy retrofit work at this house (61 Oakwood Avenue in Sudbury, Massachusetts) cost $241,000.

All through the 1980s and 1990s, a small band of North American believers worked to maintain and expand our understanding of residential energy efficiency. These were the pioneers of the home performance field: blower-door experts, weatherization contractors, and “house as a system” trainers. At conferences like Affordable Comfort, they gathered to share their knowledge and lick their wounds.

These pioneers understood what was wrong with American houses: They leaked air; they were inadequately insulated; they had bad windows; and their duct systems were a disaster.

Occasionally, these energy nerds would scoff at millionaire clients who were more interested in “green bling” — a phrase that usually described photovoltaic(PV) Generation of electricity directly from sunlight. A photovoltaic cell has no moving parts; electrons are energized by sunlight and result in current flow. panels — than they were in reducing air leaks in their home’s thermal envelope.

A shared belief

What I’ve just described is (in anthropological terms) a set of beliefs associated with a distinct subculture. Our tribe had a shared belief: that improving a home’s thermal envelope is preferable to installing renewable energy equipment.

Occasionally, a few facts would appear to undermine our belief system. For example, if a disinterested observer noted that a proposed envelope measure had a very long payback period, most members of our tribe would answer that the measure was a wise investment, because energy prices are likely to skyrocket in the future.

During the waning years of the last millennium, these North American beliefs crossed the Atlantic and were adopted by a group of academics in Darmstadt, Germany.

The beliefs became petrified in a set of rules called the PassivhausA residential building construction standard requiring very low levels of air leakage, very high levels of insulation, and windows with a very low U-factor. Developed in the early 1990s by Bo Adamson and Wolfgang Feist, the standard is now promoted by the Passivhaus Institut in Darmstadt, Germany. To meet the standard, a home must have an infiltration rate no greater than 0.60 AC/H @ 50 pascals, a maximum annual heating energy use of 15 kWh per square meter (4,755 Btu per square foot), a maximum annual cooling energy use of 15 kWh per square meter (1.39 kWh per square foot), and maximum source energy use for all purposes of 120 kWh per square meter (11.1 kWh per square foot). The standard recommends, but does not require, a maximum design heating load of 10 W per square meter and windows with a maximum U-factor of 0.14. The Passivhaus standard was developed for buildings in central and northern Europe; efforts are underway to clarify the best techniques to achieve the standard for buildings in hot climates. standard.

Times have changed

Several factors have changed since these beliefs were first formulated. For one thing, fossil fuel prices have stayed low; for another, photovoltaic equipment has gotten dirt cheap.

The (sometimes painful) fact is that it is now hard to justify many energy-retrofit measures that energy experts still eagerly recommend. Moreover, solar bling now has a fast payback.

Even though true believers still hope to see millions of homes undergo deep energy retrofits, at this point the movement is dead in the water. The cost of these jobs is unjustifiable.

Even back in 1982, Dumont and Orr were far from enthusiastic proponents of the deep energy retrofit approach. In their report on the Saskatoon retrofit experiment, they wrote, “Without question, there are many instances in which economics, based on a cost-benefit analysis, would not support the application of [the chainsaw retrofit] measures described here.”

Expensive and risky

The point was further driven home at a presentation given by Paul Eldrenkamp and Mike Duclos at the recent BuildingEnergy 14 conference in Boston. Eldrenkamp is a remodeling contractor, and Duclos is an energy consultant; their presentation was titled, “Three Deep Energy Retrofits, Three Years Later.”

Endrenkamp shared detailed cost information on one of the three projects he discussed: a 5,600-square-foot duplex in Belmont, Massachusetts. The cost of the project’s energy-related work was $258,000.

Eldrenkamp noted that the payback period for many deep energy retrofit measures is quite long. He pointed out, for example, that when a designer specifies 4 inches of polyisoPolyisocyanurate foam is usually sold with aluminum foil facings. With an R-value of 6 to 6.5 per inch, it is the best insulator and most expensive of the three types of rigid foam.
Foil-faced polyisocyanurate is almost impermeable to water vapor; a 1-in.-thick foil-faced board has a permeance of 0.05 perm.
While polyisocyanurate was formerly manufactured using HCFCs as blowing agents, U.S. manufacturers have now switched to pentane. Pentane does not damage the earth’s ozone layer, although it may contribute to smog.
for exterior walls, the last 2 inches of polyiso has a payback period of “maybe 160 years.”

He also noted that it’s very hard for a remodeling company to make any money on this type of work. “These projects are really expensive and really risky, and I don’t think they are a terrific business model,” said Eldrenkamp. “I feel no confidence that deep energy retrofits will get us very far in terms of the challenges we face. We have to come up with other tools. We have to make sure that our new buildings make sense; most of our new buildings make no sense."

Every time I write about the topic, I realize that the economic argument has become even more compelling that the last time I looked into it. Natural gas has gotten cheaper; so have PV modules.

Overcoming our prejudices

There’s a moral to this story. It’s aimed at the tribe I belong to: the energy nerd tribe. It’s time that we faced up to our prejudices — especially our prejudice against solar equipment.

If you’re giving advice to middle-class homeowners who hope to lower their energy bills, start with an energy auditEnergy audit that also includes inspections and tests to assess moisture flow, combustion safety, thermal comfort, indoor air quality, and durability.. Once you’ve done the audit, run the numbers.

Assuming the house has an unshaded south-facing roof, it’s probable that the best energy-saving measure will prove to be the installation of some solar bling.

Two counterarguments

I anticipate that some readers of this blog will disagree with my conclusions. Here are two likely counterarguments:

Today's net-metering contracts are likely to change, so the payback period for PV is about to lengthen. This issue is political, not scientific, and it is clearly impossible to predict which way future political winds will blow. Nevertheless, I feel that any upcoming changes to net-metering contracts won't be significant enough to fundamentally change the direction of current trends regarding PV payback.

For more perspectives on this issue, see The Big Allure of Cheap PV, including the discussion in the comments posted at the bottom of the page.

It doesn't matter what it costs to perform a deep energy retrofit; we need to cut down on carbon emissions to save the planet, even if our efforts are costly. Of course, any homeowners who are committed to reducing their environmental impact are free to invest in a deep energy retrofit if they want, even if the payback period is 100 years or more. But from a policy perspective, such investments make little sense.

If a government wanted to create an enlightened environmental policy aimed at reducing carbon emissions, it wouldn't invest in deep energy retrofits. (Sadly, very few national governments are interested in reducing carbon emissions, but that's a topic for another blog.) There are countless examples of low-hanging fruit that could be picked if we wanted to develop better incentive programs to achieve carbon reductions: we could increase our investments in low-income weatherization programs, for example, or create better programs aimed at improving vehicle fuel efficiency or phasing out coal-fired power plants.

Deep energy retrofits don't appear anywhere near the top of such a list. From a policy perspective, every billion dollars spent on a low-yield carbon reduction measure is a billion dollars that isn't available to invest in a more logical approach to carbon reduction.

Image Credits:

!Viva the shallow energy retrofit! I too have heard Paul talk about his experience, and I think it jibes with mine. Do upgrades to systems (including wall sections and insulation) when components need to be replaced anyway, but tearing out serviceable material or equipment usually doesn't make sense.

There are plenty of beat up, run down ranches with poured foundations - I think those are excellent candidates for DER's. Otherwise, it needs to be carefully thought through. As Paul & Mike argue, making a long-term plan for a house and making sure any work is in accordance with that plan makes more sense.

Dan,
That's a nice addition to our glossary. For new construction, the best approach is the Pretty Good House. For existing homes, the Shallow Energy Retrofit.

Another term for the Shallow Energy Retrofit approach is "weatherization" -- a tried-and-true approach that emphasizes cost-effective measures.

3.
Mar 28, 2014 8:41 AM ET

Upstate NY by Aaron Birkland

Upstate NY has a set of conditions that makes a DER look even worse on paper - low property values, high property taxes (especially as a percentage of home value), and lots of decaying old houses with deferred maintenance. I recall a similar blog post focusing on DER results in Utica, NY.

4.
Mar 28, 2014 8:47 AM ET

Law of diminishing returns applies by Robert Swinburne

Well said and thank you for saying it. There is so much pressure to do deep energy retrofits as those are what gets published and win the awards. In my experience working with people who don't have 100k or more (most of my clients), the question isn't about payback but "what can we do to make you more comfortable in your home". Often simple "weatherization" goes a long way. A shallow energy retrofit can halve the oil bill and reduce the worry about frozen pipes, mold issues, uncomfortably cold and drafty rooms in the winter etc. If you have extra money for that additional 2" of insulation, perhaps it is a better idea to donate it to your local town's low income weatherization program.

5.
Mar 28, 2014 9:52 AM ET

EnergySage by Energy Sage

Nice article!

Thanks for using and crediting our image.

If you're at all interested in going solar, you can get an instant estimate of your property's solar potential here - http://bit.ly/1gKEjv0

6.
Mar 28, 2014 9:59 AM ET

Economics - law or "tribal belief system"? by Lucas Durand - 7A

It sure seems like there is something inherently paradoxical about buying solar panels made cheap by economies of scale, which are themselves largely enabled through huge, dirty energy expenditures.

And Eldrenkamp responded, “Right. And focus on occupant behavior. And then install PV.”

But I don't think that the importance of occupant behavior invalidates the points I made in this article. It's not as if there is some form of occupant behavior that will ever make a deep-energy retrofit cost-effective.

8.
Mar 28, 2014 10:19 AM ET

Response to Martin by Lucas Durand - 7A

Martin,
Of course not.
You began your article by issuing a call to the "tribe of energy nerds" to abandon their prejudices.
Fair enough - never a bad time for some self-reflection.
All I am saying is that there is a larger "tribal belief system" that is also badly in need of some self-reflection.

Lucas,
I agree. Unfortunately, if I tried to list all of the elements of our North American tribal belief system that are detrimental to a sustainable relationship with our natural environment, my hands would get weary and would fail me before I reached the end of the list.

10.
Mar 28, 2014 10:25 AM ET

A thoughtout article. I agree by Nick DeFabrizio

A thoughtout article. I agree with the view about PV. On the other hand, I attended a Build America conference call last week in which the academic speakers presented evidence that basic energy retrofits had a reasonable return rate. Part of the question is how long of a payback period is reasonable? maybe we are holding these investments to a return period that is too short. First, most retrofits have a useful life approaching the life of the house-at least 30 years. Second, money is as cheap as it has ever been and true inflation (as opposed to the fake government statistics) is still high . With interest rates at historic lows, are alternative long term investments better? In light of Setroit, does a 30 year municipal bond at 4% make as much sense as an investmemnt in a retrofit with a 30 year useful life? Retrofits would be a safer economic bet if the home resale market recognized the value of future energy savings imbedded in a house with a retrofit, but that is where educating the public comes in (as would a few more winters like this or a future disruption in the energy markets).
I do agree that for those most interested in reducing carbon emmissions (as opposed to an economic investment), a donation to Habitat to "winterize" homes in poor neighborhoods is a better approach.
In my mind, the real issue with energy retrofits is whether it is healthy to zip up my family in a tight shell full of synthethic chemicals, even with mechaniccal air exchange.

Nick,
The approach you suggest -- calculating the cost-effectiveness of various energy retrofit measures, and choosing the measures that provide a reasonable rate of return -- is one commonly used by many programs, including the federal Weatherization Assistance Program.

As generally understood, deep energy retrofits go much farther -- often aiming for R-40 walls, R-60 roofs, and new triple-glazed windows. These are the types of projects with price tags that exceed $100,000 per housing unit.

You wrote, "The real issue with energy retrofits is whether it is healthy to zip up my family in a tight shell full of synthetic chemicals, even with mechanical air exchange." Done properly, an energy retrofit job should result in better indoor air quality, not worse. If your house is full of synthetic chemicals that worry you, it might be best to address those chemicals before settling on a weatherization plan. In any case, a properly designed mechanical ventilation system is usually preferable to random air leaks.

12.
Mar 28, 2014 1:16 PM ET

PV will soon be the cheapest energy of any type. So what? by Dana Dorsett

Yes net metering will change, but cheap batteries are coming fast on the heels of cheap PV. Grid defection is going to be a real possibility within 10 years, sooner if the utilities don't manage the tsunami of dirt-cheap PV before grid storage gets dirt cheap. If the net metering compensation becomes egregious it will invite mass grid defection- the tipping point on pricing is already pretty near at hand. These are clearly disruptive technologies that will change how the grid operates dramatically and permanently. Even the analysts at Morgan Stanley think so:

Tesla's move in to large scale battery manufacturing, while interesting and useful (particularly from a transportation-electrification point of view), I'm skeptical that lithium-ion will dominate the grid storage game for long, if ever. The liquid-metal grid battery technology currently being commercialized by Ambri while less efficient than lithium ion in the AC-DC-AC turnaround (and way too low a power density to useful in cars even if the liquid sloshing issues could be tamed). The basic materials are ubiquitous & cheap, the capacity is easily scalable to the application, and the challenges for manufacturing are negligible. It's not a high-tech product requiring exotic equipment or processes, which makes me think AMBRI or other cheap-storage startups are more likely contenders for the grid storage market than Tesla's (or A123's) lithium ion batteries. (see http://www.ambri.com/storage/documents/2014-Brochure-v3.pdf )

For those without access to sufficient sun grid defection en-masse would be an expensive disaster, as all of the maintenance costs of the grid would fall onto the remaining rate payers who still actually NEED the grid:

While PV power may soon be cheap, it's real-estate limited. Even with space heating leveraged by heat pumps, the source the annual energy use of a IRC 2012 code min house totally with ~15-20% efficiency PV takes more area than the footprint of said house in all but a few areas of the US. Even with the most efficient inverters and a theoretical-maximum PV efficiency in the ~35% range that would still be true. There is still a case to be made for deep energy retrofits implemented on a least-cost basis (even when the cost of that last inch of foam has no "payback" on direct energy costs) to lower the cost of the grid-maintenance for the grid attached homes. But it won't be long before whole subdivisions are built with a localized privately held islanded grid with minimal or no connection to the larger power grid.

Certainly from a policy point of view fixing the dead-obvious energy issues of inefficient legacy rental properties buys a heluva lot more carbon reduction than a $241K DER on a circa 1963 ~1400' house in a wealthy Massachusetts suburb:

A DER on a 3-family rental property I was involved with a couple of years ago in central MA had fairly poor solar access, a combination of sub-optimal roof angles and shading factors of neighboring buildings & trees, and needed extensive repairs (a full-gut rehab.) The cost of the foam-over was dramatically reduced by extensive use of reclaimed roofing foam rather than virgin stock, and all DER measures combined came in WELL under the DER cost of that suburban house, even before the utility subsidies were applied.

Doing the same rehab at code min the annual energy requirements could not have been met with a PV array the size of the entire urban plot, let alone on the roof of the house, but were the solar access factors better it clearly could. But the lifecycle cost, carbon reduction per dollar, and ROI of the DER in this instance is far better than the Sudbury single-family, and the cost/benefit of site-PV in this instance even at a buck-a-watt would not have been better than the "extra" 3 inches of (reclaimed) foam beyond a code-min assembly would not have been a better investment.

I was originally brought into the project by the owner who wanted to know if solar-thermal could be added to this wreck "...to be nice to the future tenants". The answer was pretty obvious on the first site visit, but the opportunity to do a significant upgrade on the thermal performance of the building was just as obvious. Pushing him into the the subsidy money for the DER through the utility-funded program made it a no-brainer, not just a "be nice to the tenants" deal, since after subsidy the cost of the thermal fixes was dead-even with the cost of what would have been necessary to meet code min (IRC 2009, in this jurisdiction.)

Whether that was the best investment in load reduction for the utility could be debated, but it's clearly not the worst, since the material cost of the reclaimed foam was less than 1/3 that of virgin-stock, and it would have needed an inch to hit code-min, which clearly IS cost effective on a lifecycle basis even using virgin-stock foam.

Bottom line, there are lots of ways to skin a cat, and lots of cats to skin. Deep energy retrofits are one, and will sometimes be appropriate, even in the era of dirt-cheap solar.

13.
Mar 28, 2014 1:46 PM ET

Chaos by aj builder, Upstate NY Zone 6a

I feel like i just experienced seeing someone surprise a flock of turkeys... birds a flight every which way... and then that's it, one roosting here, one there... me... jaw dropped... neat experience.

In the end, it's all about the money. Aaron's point is very valid here in the ADKs.

14.
Mar 28, 2014 3:40 PM ET

DER's - PR's low hanging fruit by Russell Higgins

As someone noted, DER's can get published, written up in the news, maybe even a 10 sec bite in the local news show.
Blowing insulation into the walls and roof of a building for it's very first time, is.... yawnnnnnnnnnnn, no matter how cost effective, no matter the carbon saved, etc....
There's nothing wrong with PR to get peoples attention - at which time you can direct them to what works.
and
The client, who due to DER's huge costs, are only those who can truly afford it, don't need the savings to replenish their wallets, and just want to do it because it's a good thing, foots the bill for the PR.
Win - Win.
I wouldn't try to get rich doing DER's, but they have a place in one's portfolio of projects.

Russell,
You wrote that "the clients [of deep energy retrofits] ... due to DER's huge costs, are only those who can truly afford it." That's true, and I mentioned such clients in my article. I wrote, "Of course, any homeowners who are committed to reducing their environmental impact are free to invest in a deep energy retrofit if they want, even if the payback period is 100 years or more."

You and I agree that the type of jobs we are discussing -- jobs in the $100,000 to $200,000 range -- are only an option for very wealthy homeowners. We also agree that these clients "don't need the savings to replenish their wallets."

Although these facts seem obvious to me, there is a group of designers who react negatively to this analysis, for emotional reasons. Those who question the logic behind deep energy retrofits are branded as traitors. For example, when this article was published yesterday, several designers reacted negatively on Twitter:

"PVs, no matter how cheap, don't make cold, damp, leaky homes any more comfortable."

"Seems to be a very narrow economic analysis not considering wider issues."

"You're misrepresenting yourself & your blog. It should be called 'Musings of a Simple-Payback Nerd.'"

"You imply that homeowners, energy consultants, etc. are stupid not to tailor projects to payback."

"You might as well be writing PR for ANGA/fracking, as you assume rosy projections about NG price + availability."

"That's the problem. It's not just about cost. What about health, comfort, climate change etc.?"

"How about comfort? Durability?"

So, why are all of these people reacting negatively to this article? Do they all really advocate energy retrofit jobs that cost over $100,000? If so, they are operating in a rarefied universe, and are providing services to a narrow elite.

Same reason why auto repair shots are all installing "new" parts in favor of recycled used auto parts...the margin profit being much larger .

17.
Mar 29, 2014 5:49 PM ET

Martin by Malcolm Taylor

On the list of complaints I'm surprised you didn't get "If you borrow the money it doesn't count as a cost". I've tried and tried but that piece of economics still puzzles me.

18.
Mar 29, 2014 6:00 PM ET

Reply to Russell by Malcolm Taylor

"The client, who due to DER's huge costs, are only those who can truly afford it, don't need the savings to replenish their wallets, and just want to do it because it's a good thing, foots the bill for the PR.
Win - Win."

But what are you publicizing? That you can reduce energy costs without worrying about budget or any analysis of the embodied energy of the materials used? Of what use is the PR if it is promoting something unrealistic? Implicit in this approach is the belief that as you put it: it should be done "because it is a good thing". That belief need some fleshing out. Why is it a good thing?

19.
Mar 29, 2014 6:16 PM ET

general thoughts about "3 DERs, 3 Years Later" by Paul Eldrenkamp

Every client for whom we've done a DER would do it again. They like comfortable, efficient, resilient, healthy, quiet, bug-free homes. We continue to do DERs for those reasons. We're about to start another one in May, in fact.

DERs are undeniably niche projects, like $150K master suites or kitchens. You can make an argument that they're better investments than the master suite or kitchen because in 30 years a DER will still be performing as intended whereas in 30 years that master suite or kitchen will look dated and worn and like it needs to be re-done. But they're still niche projects, and because of their cost will never have a broad market base.

Be careful of making conclusions about the cost-effectiveness of a DER based on cost data for one project. The first question to ask is, "Did anybody make any money on the project, at that cost?" If DERs are to be scalable, they need to be profitable. I learned after a few DER projects what I needed to charge for them to be able to make a modest net profit (4% to 5%), and that hard-earned knowledge made them increasingly difficult to sell.

To respond to the Twitter poster who wrote "Seems to be a very narrow economic analysis not considering wider issues": With a clients’ help, we did an analysis of a project in 2011 that made the following assumptions: $1.72 per therm of gas; 3% annual energy inflation over general inflation; societal costs of $350 for each ton of carbon, plus 3 cents for each kWh of electricity and 1 cent for each therm of natural gas; a discount rate of 4.25%; 75 year service life for the insulation component of the work; and 30 year service life for mechanical and on-site renewable systems. With those assumptions, the net present value in 2010 of a $250K investment in a DER was about $100K. Meaning that, given those assumptions, it was a not a good investment if the primary goal is mitigating climate change.

If you disagree with these assumptions, let me know what yours are and I’ll run the same analysis to see how much the net present value improves. Keep in mind that if I keep my other assumptions from that 2011 analysis unchanged but input our current local price of $1.40 per therm of gas, the net present value for the project drops from about $100K to less than $50K. In other words, the past three years have only made the investment look worse.

In my experience, the only way to make DERs look compelling from a climate change-investment point of view is to make assumptions about the future so extreme that they would not be taken very seriously even by those experts who are profoundly worried about climate change.

That being said, if you're finishing just the basement or attic, for instance, I think it makes sense to do those spaces to DER standards (https://www1.nationalgridus.com/Files/AddedPDF/POA/DER_Guide_final_lores...). We aim for "no regrets remodeling" and doing basement and attic work to DER standards is one way to achieve that goal, in no small part because of the non-energy benefits. Just don’t pretend the projects make sense purely from a carbon reduction point of view.

Finally, the energy required to implement a DER -- in particular one that uses a lot of foam insulation, as most of them do -- is not trivial, easily equaling 10 years or more of pre-project heating energy. This includes not only the embodied energy of the materials but also the transportation energy required to get the crew to the site every morning and back home at the end of the day. Carpentry crews often don't live in neighborhoods where people can afford to do DERs and so have to commute a distance. Very preliminary research we're doing indicates that the crew transportation energy required to do a DER can represent over 50% of the embodied energy of the DER. This is in part because these projects take months to do -- week after week of crews getting to the site in cars and trucks whose engines are 25% efficient (when moving).

By contrast, a PV installation takes a few days to complete and so the embodied energy represented by crew transportation for a PV installation project is a minuscule fraction of that for a DER. This is rarely factored into the equation when comparing DERs with PV, but if acknowledged, makes PV look even better—like it or not.

20.
Mar 29, 2014 7:18 PM ET

Re: comments 19 and 4 by Jonathan Teller-Elsberg

I appreciate Paul Eldrenkamp's fleshing out of his DER experience on the numbers (comment 19). I think it adds further to the point Robert Swinburne had in comment 4, which may or may not have been intended with full seriousness. I think it should be taken with full seriousness. For those home owners who are considering a deep energy retrofit--with the deep equity resources to match--because they place an extremely high value on reducing carbon emissions, Swinburne's suggestion to do merely solid weatherization at home and take all the avoided expense of a DER and donate it to low-income weatherization is spot on. The carbon reduction per dollar will be vastly greater. If the world goes to climate change hell in a handbasket, no one will care that a few houses here and there were DER'ed. (Apologies to anyone who has done or plans to do a DER. I'm sounding more judgmental than I personally feel.)

Paul, I noticed that your list of features the customers love is as much about hedonism as tree hugging. Do you have a sense of what features are the strongest motivations? If your DERs had resulted in low-carbon (emitting) homes, but they were as loud and bug-ridden as before, would your clients have proceeded? Would they have done it only for the quiet and the comfort? To what extent do you think self aggrandizement plays a part--people wanting to be "greener than thou"? (I realize you may not necessarily want to answer all of this in public, in case your answers aren't flattering toward your customers and they might happen to read this blog.)

Paul,
Thanks very much for taking the time to share your hard-earned knowledge on this topic, and especially for sharing your careful calculations of the net-present value of these expensive retrofit jobs.
I also appreciate your point about the energy required to deliver workers to and from a construction site.

While advocates of deep energy retrofits imply that those who are skeptical of the value of such work (like me) are naive or haven't bothered to do the calculations, it turns out that the eager advocates of deep energy retrofits are the ones who haven't sharpened their pencils and spent time with a calculator.

Jonathan,
Thanks for your comments. I appreciate your observation: "I noticed that [Paul's] list of features the customers love is as much about hedonism as tree hugging."

The same could be said about some of the comments posted on Twitter, at least three of which mentioned that one reason to perform a deep energy retrofit is comfort.

Just when I think that our society must have finally come to an end of our decades-long journey to ever-higher levels of comfort -- as shown in our vehicles, which are like traveling living rooms, or in our obsession with temperature control in our homes -- I discover that the obsession still rages unabated in the American soul. In the last few years, marketers have tried to convince me that the thread count on my sheets is probably too low -- one more factor that must be undermining my comfort.

And Dr. Wolfgang Feist has often explained that if there is any surface in my home that is more than a few degrees different from the air temperature, my body heat might radiate toward that cold surface, resulting in -- gasp -- a lowering of my comfort.

So, it's true: a deep energy retrofit is one way for Americans to become more comfortable. But when will this obsession with comfort be satisfied?

23.
Mar 30, 2014 10:58 AM ET

I agree with Martin's premise by Bob Irving

I agree with Martin's premise that DER's are too expensive, but let's look at the possibility that there is a less expensive way to get the job done. Dana recommends recycled foam; having used it I can vouch for the cost savings in one of the most expensive materials for the job, but it does nothing for the high cost of long screws or for the high cost of labor. And Paul talks about the high cost of labor and their transportation to the site.

I think there is a potential in looking at the cost savings in giving up on foam with all it's issues, including installation labor and the inherent problem of installing an exterior vapor barrier (which in turn leads to requiring minimum amounts of the stuff). I've been considering the Larsen Truss model, but prebuilt exterior "brackets" including floor trusses and I joists are larger than what might be needed, and site built ones can require additional labor.

Do we really need to add R26 to the walls? Would a vapor open R13 or R19 Roxul be sufficient when combined with a good air seal and a thermal break? What are the options for similar roof upgrades?

There are lots of examples of a wide variety of methods for exterior upgrades, but the consensus settled on adding foam which has proved to be expensive to the point of being unaffordable to the majority of homeowners. Before we throw out the idea of DERs, lets take another look at alternative and simpler methods to upgrade our housing stock.

24.
Mar 30, 2014 2:34 PM ET

Labor transport by Dan Kolbert

On one of our big jobs, we recommended, jokingly (but perhaps should have pushed for it seriously!) that we add a line item for an electric car for my lead, who lived an hour from the job.

If you are suggesting a different approach -- what Dan Kolbert calls a shallow energy retrofit, or what most of us call weatherization -- then I agree with you. This approach requires the designer to use cost-effectiveness as a criterion for choosing which measures to implement.

26.
Mar 31, 2014 5:16 AM ET

Deep energy retrofit by william goodwin

Another possible counter argument: houses with unattractive, failing, lead paint covered or asbestos exterior finishes might be candidates for a deep energy retrofit in conjunction with an exterior remodel.

27.
Mar 31, 2014 6:42 AM ET

No, I'm suggesting a hybrid by Bob Irving

No, I'm suggesting a hybrid approach starting with weatherization, but including increased exterior insulation without the foam (which was used in the four Buffalo examples) if possible. Obviously this means that one would need to start with a home that needed new siding (and roofing if the roof is involved).

28.
Mar 31, 2014 7:36 AM ET

Martin:
In your example of by Bob Irving

Martin:
In your example of the four Utica (not Buffalo; sorry) houses, it would be helpful, before dismissing them all as being too expensive, to have a breakdown of the costs involved. Some of the work, what you are calling "weatherization" would presumably have to be done anyway; stopping the drafts, upgrading the out-of-code issues, repairing damp basements. Other parts such as replacing failed siding would also need to be done. The cost of replacing windows could be broken down to compare the use of triple pane vinyl to the Serious windows used. Many DERs I've read about use cement board siding rather than either vinyl or local pine clapboards; absorbing the additional cost of the cement board installation into the whole DER. Of the total unit cost (you use $88k) the real question needs to be: what is the additional cost to add insulation to the envelope? What are the avoidable costs vs non avoidable costs? What areas could costs have been reduced by using materials whose costs align better with the project?
Your article is a perhaps a good example of the DER projects we have seen to date, but have found to be impractical. Even with PV. we still need to upgrade our housing stock; to repair and replace things that are not working. We also still need to find a way to affordably add insulation to buildings that need it; a way that is repeatable, We haven't yet found that way, but it is not yet time to give up.

Bob,
I would be delighted if builders attempt one of your suggested approaches and report their cost data back to GBA so we could see if your hunch is right.

I'm guessing that your suggested approaches won't cost any less than jobs using exterior rigid foam. Builders have been performing wall retrofits with Larsen trusses for more than 30 years, so we have pretty good data on those jobs. (In most cases, they aren't any cheaper than rigid foam retrofits.)

When it comes to mineral wool retrofits, time will tell. I don't think there is any evidence that such jobs save money compared to exterior foam.

As a reminder of how long builders have been doing retrofit jobs with Larsen trusses, it's worth reviewing the Fine Homebuilding article from April/May 1984 titled "Retrofit Superinsulation." (For more information from this article, see All About Larsen Trusses.)

We just did a quick and dirty calc for a renovation we're looking at; using TJI's as trusses and filling them with cellulose would cost at least twice as much as using new rigid and strapping. Your mileage may vary.

32.
Mar 31, 2014 10:40 AM ET

How to calculate costs? by Dan Kolbert

And yes, it's critical that we account for costs accurately. If a house needs re-siding, how much of the eventual cost is the re-siding and how much the exterior foam? Lumping them all together as a DER doesn't help us figure out the cost effectiveness.

My point (and I believe that of Paul E.) is that tearing off good siding to add insulation is hard to justify. Whenever we have the opportunity, we try to upgrade a home's performance. But we're wary about "creating" opportunities.

Dan,
I agree with your statement: "My point (and I believe that of Paul E.) is that tearing off good siding to add insulation is hard to justify. Whenever we have the opportunity, we try to upgrade a home's performance."

Getting back to the PV side of the discussion for a second in relation to reducing carbon emmissions. With respect to installing a grid tied PV system, I have never understood clearly whether there is a linear relationship between the amount of kw the PV system produces and the reduction in carbon emmissions that results. For instance, if my local power plant emits 100 units of carbon for each 10kw of energy produced, will a 10kw PV system eliminate the exact same amount (100 units) of emmissions? Another way of saying this is to ask whether a kw of energy produced by a PV unit saves the same amount of emmissions as a reduction in use of a kw of electricity ? Does this depend on many factors such as whether the electricity produced is on/off peak, the capacity of the grid, whether the plants are running on main fuels (e.g., coal), peak load fuels (e.g., gas turbines) etc?

Nick,
There are some inefficiencies in PV production (mostly due to the inverter, with some line losses) -- but 92% to 95% efficiency is reasonable for a grid-tied system. Whatever electricity is produced by the PV system is used.

If your local utility has a single generating station, then the PV power displaces the power produced by the generating plant. If the local utility has multiple source of electricity, then time of day and other factors obviously matter.

36.
Mar 31, 2014 5:28 PM ET

Thanks Martin. Since the by Nick DeFabrizio

Thanks Martin. Since the turbines need to run anyway, I always figured that the actual amount of emmissions reduction from a small amount of reduced power (whether from PV replacement or efficiency reduction) was small. But maybe not.

37.
Apr 1, 2014 9:27 AM ET

PV Panels will keep getting better... by Albany Landlord

Martin commented that each time he does the analysis the argument in favor of PV keeps getting stronger. Prices for PV will only keep falling. For those of you on the fence, how do your beliefs hold up when PV prices fall another 25%? 50%? Despite the arguments of Dana (#12), battery technology is what will be holding us back now, and there is no big improvements seen there, only very slow incremental improvements, but even so energy will only get cheaper.
I recently read a Book titled "Abundance: The Future is Better Than You Think" where the author Peter Diamandis postulates that energy will become nearly free over the next few decades. A very provocative idea and interesting reading. It certainly turns the long term payback period discussions on their head...

38.
Apr 1, 2014 11:05 AM ET

Missing is the benefit of passive survivability by Alex Wilson

Martin,
The other justification I often make for going beyond insulation levels that have reasonable rates of economic return in favor of PV is that the vast majority of PV systems are grid-connected (stand-alone PV systems with batteries cost far more), and when the grid goes down and you lose your heat it's important to maintain livable conditions passively. High insulation levels provide that passive survivability or resilience.

Alex,
You're right. My guess, however, is that it's possible to make significant improvements in passive survivability without going all the way to the usual deep energy retrofit formula of 10-20-40-60.

The most significant performance improvements, I'll wager, would come from air sealing efforts.

40.
Apr 1, 2014 4:46 PM ET

The carbon offsetting of PV... by Dana Dorsett

... isn't exactly the annual average of the local grids carbon/kwh. PV output occurs primarily during demand hours, a time at which dispatchable fossil burners are ramped up. And PV output is still usuall pretty good during the air conditioning peak power loads (usually the absolute high peaks.) Most of that peak power on most regional grids is delivered by lower efficiency but highly responsive gas or oil burners, not baseload nukes or high efficiency combined-cycle gas.

Since the time of day and even the time of year makes a difference, there is no simple answer. But in general, PV will be offsetting MORE carbon per kwh delivered than the annualized grid average, since it's offsetting during higher demand and peak demand periods when the carbon-intensity of the grid is higher than average.

41.
Apr 1, 2014 8:22 PM ET

Re: Albany Landlord and "Abundance" by Jonathan Teller-Elsberg

Sorry, but you lost me at "energy will become nearly free." Deja vu all over again? Too good to be true usually is just that. I recommend trying your best to erase all memories of that book so you don't start making decisions based on snake oil wishful thinking.

42.
Apr 1, 2014 9:01 PM ET

I agree with Albany landlord. by aj builder, Upstate NY Zone 6a

I agree with Albany landlord. Get PV and get an ebike and Tesla or Leaf etc. Even better get off the land and onto a boat as I see no end to the rise in property taxes and all other taxes. Every government is broke and or bonded and borrowed to 10 times their costs. Future promised healthcare and pensions add up to quadrillions whatever that number is.

Energy is never going to be a problem till the sun hiccups.

43.
Apr 2, 2014 9:43 AM ET

Re: "Abundance" by Jonathan Teller-Elsberg

AJ (and Albany), the sun will keep shining, no doubt. Energy will continue to exist. That is quite a different statement than "energy will be nearly free," and I can't see how that has anything to do with property taxes. It's not that it is impossible in theory for energy to become amazingly cheap, it's just that that seems a really bone-headed assumption to make when making decisions that affect or depend upon energy consumption. If energy is going to become nearly free in the near future, does that mean that you are cheating your customers out of tens of thousands of dollars by building them efficient homes? After all, that efficiency isn't worth bupkiss if energy is going to be nearly free. All they need is a big tent and gargantuan heat pump.

44.
Apr 2, 2014 10:38 AM ET

Edited Apr 2, 2014 10:39 AM ET.

I don't think you need a by Terry Lee

I don't think you need a bunch of fancy present and future cost analysis that may or not be accurate, probably about as accurate as looking in a crystal ball, or bogged down tech data some client won't understand or may understand better than you. Below is a good article on what clients want and how/where to sell it. A DER does no good if it can't be sold. Better watch the claims and FTC too :)

The panel costs are now a small fraction of a grid tied PV array, and in fact are less than the "customer acquisition" cost (the advertizing/bidding proposal/hand-holding costs.) In MA the unsubsidized cost for grid tied PV is running $3.50-$4.25/watt for turn-key sub-10kw grid-tied, but in streamlined & competitive markets like Germany and some parts of Texas it's now coming in under $2/watt. Most analyst estimate residential grid-tied will come under a buck-fifty a watt average in the US before 2020, and utility scale under a buck. Not exactly free, but at a lifecycle cost of energy lower than any other grid source. Clearly price will not be the limiting factor for the expansion of PV as a grid source.

But like price, battery technology is also not the limiting factor for PV becoming an all-dominant player in the electricity markets: Real estate is. Recent NREL analysis came up with an estimate that only ~25% of the rooftop area in the lower 48 are suitable for photon-farming. But battery technology for grid storage is seeing more than incremental improvement, at least from a cost point of view. While progress in high power density technology (necessary for electrification of the transportation sector) such as lithium ion is incremental (but also poised for significant reductions in cost- Tesla is going after that in a HUGE way), there are now disruptive very low cost technologies for grid storage just now entering the market, and it's not just Ambri's liquid metal battery approach. Grid storage is a red-hot market being chased by venture capital right now, and the international market for grid storage is huge- currently far greater in Europe than the US, but starting with CA's recently passed mandate the growth here will exponential for at least another decade.

But that's irrelevant if you don't have site access to the sun. The PV vs. DER dichotomy is a false one, cooked up at a time when PV was the paradigm (straw-man?) for "expensive energy". But it was as false then as it is now- it's just more obvious now.

At any PV/other energy price you still need the infrastructure of sufficient energy to deliver that energy, and that infrastructure has both capital & maintenance costs. A more useful analysis than PV vs. DER lifecycle costs would be the lifecycle costs of the infrastructure + energy costs for supporting the higher loads vs. the lifecycle costs of lowering the load, and where the crossover points with different load reduction strategies. Clearly cellulose at 3 cents/ R-foot is going to have a different financial crossover point (at any presumed future energy cost) than closed cell polyurethane at 17 cents/R-foot, or virgin stock EPS/polyiso at 10 cents/R-foot.

There is no way to hit Y2050 carbon reduction targets without dramatic improvements in both building efficiency and transportation sector efficiency- you're not going to get there by merely producing enough cheap PV output to cover for the higher loads of inefficient use of that energy. As an approach Deep Energy Retrofit isn't insane- in fact it's necessary. Something like 80% of the buildings that will be around in Y2050 have already been build. The "How deep is deep enough?" question is still valid, even if it isn't rightly couched in terms of it's comparative costs of PV-power (which will be very cheap very soon), or the ROI just the energy offset for that last R5 of insulation. Both timing and methods of the retrofits affect the financial analysis, but ignoring the energy use levels of a circa 1963 house (or a circa 1890 house) for the next 35 years, thinking you can just more cheaply buy enough PV (on site or elsewhere) to adequately cover the load isn't really a viable option without the necessary solar-real-estate or grid infrastructure.

46.
Apr 2, 2014 12:48 PM ET

Response to Dana by Lucas Durand - 7A

Dana,
You wrote:

There is no way to hit Y2050 carbon reduction targets without dramatic improvements in both building efficiency and transportation sector efficiency- you're not going to get there by merely producing enough cheap PV output to cover for the higher loads of inefficient use of that energy.

Not sure which targets you're referring to, but in any case I would add that there is no way to hit those targets without taking some steps to mitigate against further growth of energy demand period.

The problem isn't likely to be a shortage of renewable energy so much as a "longage" of expectations.

47.
Apr 2, 2014 3:40 PM ET

Great Article - PV is the key to real carbon savings. by Adam Stenftenagel

I've run a few scenarios for Colorado homes looking at energy retrofits, PV and electric vehicles (EV). The typical annual carbon savings from a $5,000 to $10,000 retrofit comes in at around 4 metric tons. If you were to drive an EV instead of a 25 MPG car and power it with the dirty Colorado grid, you'll save around 2 metric tons compared to gas, but if you power the whole house's electric demands and the EV with PV, you'll save a total of 14 metric tons for all three improvements. There's no doubt that making the house less leaky and better insulated will make for a more comfortable home, but do we need to go all the way with a deep energy retrofit? Let's hit the low hanging fruit of energy efficiency, then concentrate our efforts on PV and EV.

48.
Apr 2, 2014 4:05 PM ET

80% below 1990 levels... by Dana Dorsett

... is a commonly bandied carbon-reduction target for the already-developed world in order to limit the Y2100 temperature rise to merely "broil". Some countries (eg: the UK ) have written "80% below 1990 emissions by 2050" into binding legislation, other countries have set themselves binding shorter term goals, but on the same end goal. That's also the stated target in various pieces of proposed climate legislation in the US.

Greening up the grid only gets you part way there. Cutting space heating/cooling loads and moving off of fossil-fuel heating into heat pump technology would be another huge step, as would electrification of most of the private automotive fleet. But you can't get buildings AND cars off of the fossil-carbon habit just by covering the entire states of Arizona, or Texas with cheap PV and boxes o' batteries, with long jumper cables to the rest of the US. The notion that it's affordable or desirable o power the east coast from midwestern wind resources (a popular idea in some quarters just a few years ago) has be pretty soundly debunked.

Reducing building loads to where site-sourced energy (or nearby-site sourced energy) can carry a large piece of it is still going to be a large and mostly affordable slice o' the low-carb pie, but it's going to take more than just the lowest possible hanging fruit. While retrofitting every home to where it's total energy use is 80% below 1990 levels isn't financially viable, there are many cases it clearly is, especially when handled at a lowest cost basis, and staged at opportunity moments such as re-siding or re-roofing, etc that only come along every 20-50 years.

On the up-side, electricity demand in the US has been flat or falling for nearly a decade now, mostly the product of efficiency efforts, despite the protestations of the "you can have my incandscent light bulbs when you take it out of my dead scorched hands!" types. But the efficiency well (both electrical and heating/cooling load) well is still pretty deep & cheap compared to new generation of any type. If the US got serious about targeting efficiency over & above energy production you wouldn't need to build new power generation for decades (if ever). While a quarter million 'merican shekels per house like the 61 Oakwood Avenue straw-man won't make sense, half that might, compared to the capital cost of the PV & grid infrastucture required to support the original energy load for the next century. But it doesn't have to be that deep (and certainly not that expensive) to end up with something that meets or exceeds the "80% below 1990 levels by 2050 " carbon goals.

49.
Apr 2, 2014 4:13 PM ET

Edited Apr 2, 2014 4:19 PM ET.

The Treehugger post that I didn't publish by Lloyd Alter

I spent a lot of time last weekend thinking about this issue and drafted a long post for TreeHugger, where I am managing editor, but decided that we shouldn't have one green blog criticizing another green blog, so I have edited it and put it here for discussion.

Over at Green Building Advisor, Martin Holladay writes a provocative post with the title Deep Energy Retrofits Are Often Misguided. My first reaction on reading it was to tweet:

"OK this contradicts everything I write or teach."

Now that I have had time to think about it, I realize that Martin is at least half right, and that we have been saying much the same thing about where people should put their money. Martin starts with a bit of history and writes about the the first people to do what became known as deep energy retrofits, (defined as " whole-building analysis and construction process that uses "integrative design" to achieve much larger energy savings than conventional energy retrofits")

"These pioneers understood what was wrong with American houses: They leaked air; they were inadequately insulated; they had bad windows; and their duct systems were a disaster. Occasionally, these energy nerds would scoff at millionaire clients who were more interested in “green bling” — a phrase that usually described photovoltaic panels — than they were in reducing air leaks in their home’s thermal envelope."

Martin then describes what he calls a "tribe belief: that improving a home’s thermal envelope is preferable to installing renewable energy equipment." However he questions whether that belief is still justifiable.

"Several factors have changed since these beliefs were first formulated. For one thing, fossil fuel prices have stayed low; for another, photovoltaic equipment has gotten dirt cheap."

The latter may be true but as for the former, my natural gas just jumped 40% thanks to the cold winter. The province of Ontario has switched from coal to a lot more natural gas, and what will happen to electrical prices is unknown and will probably be pushed to after the next election. He's just wrong on that point. Putting solar on my roof won't reduce my carbon footprint either; I pay extra for Bullfrog green power that comes from water and wind.

The fact is, deep energy retrofits have never made economic sense in terms of payback and are questionable building practice for a lot of older homes. Put too much insulation inside a brick wall and you kill the heat movement that drives out moisture. Change the windows and you ruin the character of the house and switch windows that have stood for a hundred years with replacements that will lose their argon fill in a decade and rot from the sun in twenty years, and barely perform better than the ones that were removed. Seal the house up too tight without proper ventilation and you create a sick building.

But "reducing air leaks in their home’s thermal envelope" certainly does make sense. There is a ton of low hanging fruit that people can do, from caulking to attic insulation to duct sealing to lighting to appliance changes that pay off fast. Martin doesn't say this. He says "Assuming the house has an unshaded south-facing roof, it’s probable that the best energy-saving measure will prove to be the installation of some solar bling."

Just say no. First of all, It is ridiculous to say that people should put solar panels on their roof why they continue to live in cold draughty houses. Comfort matters, and a solar panel doesn't change that.

Secondly, such a theory only works for Americans who live in nice suburban houses with big roofs facing south. We have a lot of homes to retrofit in North America, and that is just a small proportion of them.

Thirdly, as Alex Wilson has pointed out in comments and on his website, insulation gives you resilience. He writes:

The other justification I often make for going beyond insulation levels that have reasonable rates of economic return in favor of PV is that the vast majority of PV systems are grid-connected (stand-alone PV systems with batteries cost far more), and when the grid goes down and you lose your heat it's important to maintain livable conditions passively.

Finally, Martin's fondness for solar bling would make it impossible for the other things we have to make happen: higher density (less roof area per person), more trees (shading battles). We simply can't afford the kind of land use that lends itself to useful rooftop solar.

A solar panel is not an alternative to having a properly sealed, insulated and weatherized house.

50.
Apr 2, 2014 5:26 PM ET

Not die in the cold by Tom Gocze

A DER or super insulated new home offers great comfort--mentally and physically in northern climates: If (and when) the power goes out, the house and its occupants can survive. Having lived through the Ice Storm of 1998 in Maine, we had built a super insulated home for a friend a year or two before. It was an R-40 shell on an insulated radiant slab that was heated with propane. The windows were low-E argon double glazed. Nothing real exotic like a Passiv Haus. It was built for a single older woman. She had her family come stay with her. She had no power for 7 days. No solar gain since she was in the woods.
She did have a gas cookstove. I spoke with her 6 months after the fact. My first question was what was the temperature after 7 days of no power, not much solar gain in a typical January in Maine.
She told me it was 60F teetering on going to 59F.
I said, "Well, you used the cookstove oven to keep warm, as many folks did." She said they did not, only using the stove for cooking. Granted there were 6 people in the house, but the tight, insulated shell got her through.
Until we have a stand alone PV system that will do everything we want it to do, I suspect anyone in (at least) the northern tier of states can make a good case for highly insulated structures.

[Editor's note: To continue reading comments, advance to page 2 by clicking the box with the 2, below.]

About the Author

Martin Holladay has worked as a plumbing wholesale counterperson, roofer, remodeler, and builder. He built his first passive solar house in northern Vermont in 1974, and has lived off the grid since 1975. In 1980, Holladay bought his first photovoltaic(PV) Generation of electricity directly from sunlight. A photovoltaic cell has no moving parts; electrons are energized by sunlight and result in current flow. module, which is still producing electricity after all these years. Read more...